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Unclaimed Property Focus
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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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UPPO members play essential role in growing membership

Posted By Administration, Thursday, October 27, 2016

Whether it’s educating holders, working to ensure fair regulation or bringing unclaimed property professionals together, UPPO’s initiatives depend on a large, active membership. Growing membership helps strengthen the organization and the profession it represents, so recruiting new members is an unending task.

 

Fortunately, many potential members learn about UPPO from current members who recognize the benefits of bringing more people into the organization.

 

Mike Ryan, senior vice president at Georgeson, has recruited several UPPO members. He often speaks to industry groups about unclaimed property issues, and includes a discussion about UPPO and its resources for holders within his presentations. Individual conversations with attendees at these events also often include encouragement to join.

 

“The greatest thing about UPPO is the networking—the sharing of ideas and things that work and don’t work,” Ryan says. “The more members we have, the more experiences we can tap into.”

 

Ryan finds that potential members are often intrigued by the ability to connect with peers who share similar issues and speak the same industry jargon. He frequently shares the benefit of the industry breakout groups at the UPPO Annual Conference and the online member forum.

 

“If someone handling unclaimed property for a bank, for example, knows the annual conference will likely be attended by peers from 20 other banks who understand the issues they’re dealing with and are willing to share, they want to be there too,” Ryan says.

 

Randy Hotz, president of Choice Plus LLC, recently referred a new member to UPPO. They first met at a Michigan Senate finance committee hearing and had a series of subsequent conversations. Several times, while talking about unclaimed property issues, Hotz mentioned UPPO’s work and encouraged membership.

 

He focused on the association’s long track record of advocacy, professional reputation and positive standing among stakeholders, including holders, the National Association of Unclaimed Property Administrators, individual state administrators, the American Bar Association and the Uniform Law Commission. Soon, his encouragement paid off in the form of a new UPPO member.

 

“For people truly interested in getting involved, it’s not that difficult to sell them on the benefit of membership,” Hotz says. The trick is identifying those people who are a little more active and motivated.”

 

In addition to the networking, conference and advocacy benefits, some of the other benefits that often resonate with potential members include:

  • Educational webinars and events
  • Tools and resources available on the website, including the Jurisdiction Resource Guide
  • Legislative and regulatory tracking via govWATCH  

 

As a token of appreciation for members who refer new members and to encourage member references, UPPO thanks referrals with a $100 gift card. To learn more about UPPO’s Membership Referral Program, access a digital version of the UPPO member packet or request printed copies, visit UPPO’s member referral web page.

 

 

Tags:  advocacy  education  membership  networking  recruitment  UPPO 

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State Spotlight: Oregon unclaimed property goals focus on holder needs

Posted By Administration, Thursday, October 20, 2016

At Oregon’s Department of State Lands Unclaimed Property Section, 10 staff members, led by Unclaimed Property Manager Patrick Tate, strive to reunite Oregonians with their property. To accomplish this, many of their goals focus on making property holders’ lives easier. Among the department’s short-term and long-term plans are initiatives aimed at helping holders access information more easily and streamlining the reporting process.

 

By the end of the year, the department plans to introduce a new, more user-friendly website design aimed at giving holders simple access to the information they seek.

 

“Holders are busy and have a lot to do,” Tate says. “We want them to find what they need from us within two clicks of coming to our site.”

 

There are also plans to expand the website’s resources, adding a series of short videos covering the basic details of unclaimed property reporting. The video series will be modeled after the department’s successful workshop series held each spring and summer at locations throughout the state. Annually, department staff lead 12 seminars, which provide an overview of the reporting process, updates on unclaimed property changes and a Q&A period to address holder challenges. The video series will offer an alternative to the workshops for holders who are unable to attend, and can give previous attendees a chance to brush up on the things they learned.

 

Among the topics discussed during the annual seminars is the need to report electronically. Although the state began requiring electronic reporting a few years ago, it still receives about 400 of the approximately 8,000 submitted reports via hard copy. The department hasn’t penalized those who file using paper reports, preferring to help them make the transition.

 

“For some holders—including several state agencies—getting the data out of their systems and into the format we need is a huge challenge,” Tate says. “We’re working with them to get them up to speed and into electronic reporting.”

 

The department will also be streamlining the reporting process, giving holders options for submitting payments electronically. As part of this November’s reporting cycle, the department is accepting credit card payments for the first time, and it is working to add ACH payment as an option in 2017.

 

Currently, the department offers a basic online reporting tool that works well for holders with only a few reports to file. Plans are in the works for upgrading the tool, making it more robust so it meets the needs of larger holders as well.

 

Of course, ensuring holders report their unclaimed property requires some effort too. The department includes one auditor, who spends much of her time educating the state’s businesses about compliance requirements.

 

“Her main goal is education,” Tate says. “In some cases, she’ll call companies that aren’t reporting and do a workshop by phone. Sometimes she’ll visit and spend a couple hours talking about unclaimed property. And then sometimes she’ll ask for records and do a true audit. In all cases, we’re there to help them get into compliance. The intent is to get them up to speed and reporting.”

 

Because Oregon doesn’t charge penalties and interest, holders who realize they aren’t in compliance can simply include it on their next report, according to Tate. If they want the protection of a voluntary disclosure agreement, the department makes that option available as well. 

 

The state also has relatively liberal due diligence requirements; giving holders the ability to take whatever steps they believe would be most effective. They can send letters, make calls, post on an employee bulletin board—whatever they believe would be effective for their individual circumstances.

 

Despite Oregon having holder-friendly policies and goals, Tate is aware that state administrators are sometimes “painted with a broad brush” based on the practices of some of the more aggressive states. However, these perceptions simply aren’t applicable in Oregon. According to Tate, because unclaimed property funds don’t go to the state’s general fund, his department has faced virtually no legislative pressure. All unclaimed property is held in a trust forever in the state’s Common School Fund. The state’s public schools receive interest earnings twice each year, but the original principal remains in the fund forever.

 

As such, Tate and his department stay focused on the goals at hand—returning money to Oregonians and helping holders more easily fulfill their responsibilities.

 

“Our entire unclaimed property program hinges on holders,” he says. “They’re our partners—the first piece in the process. We try to come up with ways to make it easier for them to report to us.”

 

For more information about Oregon’s unclaimed property program, visit the state’s unclaimed property web page.

 

 

Tags:  compliance  Oregon  unclaimed property 

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UPPO Scholarship opens doors for 2016 recipient

Posted By Administration, Thursday, October 13, 2016

The obvious benefit of receiving a UPPO scholarship is the financial relief it provides, but for 2016 recipient Charles Julius, it has done much more.

 

“The scholarship has really opened a lot of doors for me to explore the interests I can pursue and build on what I can do in the future,” he says. “That opportunity is really important to help me move forward with my education.”

 

A sophomore at Carthage College in Kenosha, Wis., Charles is majoring in biology and chemistry. He plans to attend medical school to become a family doctor or practice sports medicine. Beyond the classroom, he is heavily involved in extracurricular activities, swimming on his college team, participating in academic clubs and playing violin in the orchestra.

 

His love of music struck early, and he began learning violin at the age of five. Although he has no plans to pursue a musical profession, Charles knows playing music will always play an important role in his life. In fact, he believes his overall college experience is already shaping his future, beyond working toward a career. “Being at a liberal arts school, I have a lot of opportunities to do a lot of different things,” he says. “I feel like I’ve cemented the foundation of how I want to live my life, and everything else above that is icing on the cake.”

 

To anyone considering applying for the UPPO Scholarship, Charles offers some wise advice. “Whether it’s a scholarships or anything, take a chance—take the opportunity. You can’t win it if you don’t apply.”

 

The 2017 UPPO Scholarship Program will open on Nov. 1 and remain open until Dec. 31, 2016. Beginning in 2017, UPPO will expand its award from one to two, renewable, $1,000 scholarships.  Current UPPO members and their dependents may apply. Learn more about the past recipients and the program qualifications. UPPO members interested in supporting the scholarship are encouraged to contribute or sponsor the program.

 

 

Tags:  UPPO Scholarship Program 

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UPPO seeks clarification about Pennsylvania’s due diligence and IRA provisions

Posted By Administration, Thursday, October 6, 2016

On July 13, 2016, Pennsylvania Gov. Tom Wolf signed H.B. 1605 into law. The massive bill revises the commonwealth’s Fiscal Code, including its unclaimed property program. Among H.B. 1605’s unclaimed property provisions are requirements for conducting due diligence and escheating Individual Retirement Accounts (IRAs). Unfortunately, the law’s language is causing confusion for unclaimed property holders. In an effort to gain clarity, UPPO submitted a letter to Treasurer Timothy Reese and legislative leaders on Sept. 22, 2016.

 

Due Diligence

One of the new statutory provisions imposed by H.B. 1605, Section 1301.10A, requires holders to perform due diligence for property valued at $50 or more when the holder’s records do not disclose the owner’s address to be inaccurate. The statute specifies that holders must send written notice by first class mail, “unless the owner has previously agreed to a method of electronic notice that remains valid to contact the owner.”

 

The statute’s wording opens the door to multiple interpretations. It is unclear whether an owner’s agreement to receive electronic notices triggers a requirement for the holder to use electronic communication or merely gives the holder the option to choose either first class mail or electronic communication.

 

The due diligence provision also fails to specify what constitutes owner agreement to receive electronic communication. It fails to define whether the owner’s request to receive any type of communication from the holder is sufficient or if the agreement must specifically include due diligence notices. Similarly, it causes confusion for holders who have received consent to send specific types of communication via one method (tax forms by mail, for example) and other types of communication via another (i.e., general account information by email). 

 

IRA Distributions

Under federal law, IRA owners are allowed to take account distributions beginning at age 59 ½ without penalties and are required to take account distributions beginning at age 70 ½. If they choose to take distributions before 59 ½, they are subject to an additional 10 percent “early distribution” tax (with some well-defined exceptions).

 

Section 1301.8(2) of H.B. 1605 suggests that IRAs could be reportable to Pennsylvania regardless of the owner’s age. This could trigger the 10 percent early distribution penalty for owners under the age of 59 ½. Because the Internal Revenue Service has not addressed whether unclaimed property reporting of an IRA owned by someone younger than 59 ½ triggers the early distribution tax, the change to Pennsylvania’s law could lead to several unintended risks for IRA owners and custodians, including:

  • The incorrect application of taxable income reporting.
  • Tax withholding and overall tax liability computation.
  • Long-term loss of compounded interest earned on account balances.
  • Long-term loss of the accrued value of reinvested dividends no longer accruing on accounts.
  • General interference with the long-term retirement investing goals of individuals who often use IRAs as passive, long-term investments with no expectation of the need to access the funds prior to retirement.

In its comments, UPPO encouraged Pennsylvania officials to consider the potential negative tax consequences of the unclaimed property provisions on the commonwealth’s residents and questioned whether the state has the authority to subject residents to such consequences.

 

Federal Preemption

The new IRA dormancy standard in H.B. 1605 also may conflict with federal law governing the creation, control and tax treatment of such accounts. UPPO points out that the tax implications from IRA distributions required by the new law contradict Congress’ intent to provide a clearly defined and heavily regulated tax benefit to retirees. Thus, the state’s unclaimed property law would violate the Constitution’s Supremacy Clause, which establishes that federal law takes precedent.

 

Pennsylvania Law Inconsistency

In addition to the apparent conflict with federal law, H.B. 1605’s IRA provisions seems to conflict with Pennsylvania’s own unclaimed property principles. UPPO writes, “The Pennsylvania Disposition of Abandoned and Unclaimed Property is founded on the premise that the Commonwealth may take custody of property that is ‘payable or distributable’ to an owner, but which the owner has abandoned or neglected to claim. The change implemented by H.B. 1605 permits the Commonwealth to take custody of assets that are not ‘payable or distributable,’ and ignores whether the owner has truly abandoned the property or not. Thus, the legislation crosses over the threshold of taking custody, and acts instead to confiscate the assets of Pennsylvania residents.”

 

A spokesperson for Pennsylvania’s Treasury Department told The Wall Street Journal that the dormancy standard was aimed at protecting retirement account beneficiaries, allowing them to access IRA accounts when the owner died before the mandatory IRA distribution age. The wording of the new IRA dormancy provision, however, is overly broad for that intent.

 

UPPO hopes to receive clarity regarding these issues soon. We will update membership via the blog with news and developments related to the UPPO letter or these regulations. View UPPO’s letter.

 

 

Tags:  compliance  due diligence  IRAs  Pennsylvania  unclaimed property 

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Raising Visibility and Communicating Success

Posted By Administration, Thursday, September 22, 2016

In many companies, the unclaimed property department has a relatively low profile, going about its business with little fanfare. Unless the company faces an audit, senior management and other departments may not understand or fully appreciate the unclaimed property function.

 

Communicating ongoing efforts and successes raises visibility, builds awareness and increases appreciation for the department’s work and contributions to the company’s goals. Promoting the department’s work helps other departments understand how their practices affect unclaimed property compliance and can help create efficiencies.

 

The methods unclaimed property professionals use to demonstrate their efforts run the gamut from routinely tracking and reporting metrics to less formal, but consistent reminders of unclaimed property’s role and function.

 

“Unclaimed property has so much of an exposure and there are so many audits, and senior management isn’t close to our everyday work,” says Marilyn Henry, manager of UnitedHealth Group’s Unclaimed Property Reporting and Recovery Unit. “I think tracking and reporting that information to them provides a feeling of comfort that we’re doing what we’re supposed to be doing.”

 

Henry’s unit reports monthly metrics, including the dollar amount and number of reports filed by state for the company’s subsidiaries, pre-escheat check review data, and dollars recovered for the company from other holders. In an ongoing effort to present the most useful information possible, they are planning to begin tracking and reporting on the number of due diligence letters sent as well.

 

Tracking specific statistics highlights trends and the volume of work produced, but some unclaimed property departments prefer a less formal approach to communicating their efforts. Delores Dupras, senior accountant with Amica Mutual Insurance Company, prefers taking advantage of opportunities to discuss unclaimed property at meetings and during discussions about other departments’ procedures that may lead to an unclaimed property liability.

 

“Not too many people understand escheatment or unclaimed property,” she says. “Someone may print a check they shouldn’t have and simply stick it in a drawer, thinking it isn’t a problem because they never sent it out. Anytime I speak up about unclaimed property, it creates awareness that this goes on. If they have a live copy of a check and they don’t know what to do with it, I want them to know they can reach out so we can figure out how to handle it.”

 

Regardless of whether an unclaimed property department tracks specific metrics or uses less formal methods, demonstrating the department’s role and value can be done by consistently communicating when opportunities arise. Richard Dodson and Nancy Burke, authors of “Power Your Career: The Art of Tactful Self-Promotion at Work” recommend developing the habit of seeking small opportunities to demonstrate value.

 

“We go to meetings all the time, and most people just want to get out of there rather than using them as an opportunity to be visible and share something positive about what their department did or a member of their staff did,” Dodson says. “I don’t have to be talking about myself. I could be talking about a contribution someone else made, but I’m focused on results and cultivating a positive reputation. That’s another huge opportunity. I may as well figure out a way to take advantage of those meetings and being a positive force.”

 

One of the most common opportunities Dodson and Burke recommend starting with is the routine hallway conversation when someone asks, “How are you?” Rather than responding with “great” and talking about plans for the weekend, use it as a chance to highlight your work. The boss is much less likely to care about your weekend plans than how excited you are about your fall reporting season progress.

 

“Most of us don’t take the time to think through what would be important to the person we’re talking to and how do to tell that story in a way that highlights our skills and what we’ve accomplished,” Burke says.

 

Dupras relishes her role “beating the unclaimed property drum” and uses opportunities to speak about unclaimed property to increase awareness and affect change.  

 

“Every business decision we make directly will affect unclaimed property in the future,” she says “I’m the person who brings up unclaimed property in meetings, and people don’t understand why at the time, but it all trickles down.”

 

How do you communicate your efforts and successes with management and coworkers? What metrics do you track? What opportunities do you use to promote the importance of the unclaimed property functions? Add a comment to this post to share your experience.

 

Tags:  metrics  unclaimed property 

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